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Definition: Market Follower Strategy
‘Market Follower strategy’ is a strategy of product imitation. The innovator bears the expense of developing the new product, bringing in the technology, breaking entry barriers and educating the market. However, another firm can come along and copy or improve on the new product.
Although it probably will not overtake the leader, the follower can achieve high profits because it did not bear any of the innovation expense.Many companies prefer to follow rather than challenge the market leader. Many runner-up companies do not challenge the market leader.
The four follower strategies are as given below:
1. Counterfeiter: Copies the leader’s product and packages and sells it on the black market. E.g.pirated music/ movie CDs
2. Cloner: Copies the leader’s products as it is as well as name, packaging with slight variations.
3. Imitator: Copies some of the things from leader’s product but maintains difference in packaging, and other factors.
4. Adaptor: Launches improved products over that of the innovator’s.